BlackRock will close two UCITS iShares exchange-traded funds that have exposure to Russian securities, it said in a statement Friday, citing Russia's invasion of Ukraine.
Both of the funds — the iShares MSCI Eastern Europe Capped UCITS ETF and the iShares MSCI Russia ADR/GDR UCITS ETF USD (Acc) — had already suspended creations and redemptions, and were suspended from trading on-exchange, according to BlackRock.
"Due to Russia's invasion of Ukraine, normal market trading conditions have remained materially impaired, and a significant portion of Russian securities are still not currently tradable for non-Russian foreign investors," BlackRock said in the statement. Consequently, BlackRock said in the statement, it believes it's acting in shareholders' interests by closing the two funds.
The iShares MSCI Eastern Europe Capped UCITS ETF had $108.3 million in net assets as of Feb. 25, according to BlackRock's website, while the iShares MSCI Russia ADR/GDR UCITS ETF USD (Acc) had $17.6 million in assets as of March 2.
While BlackRock's website said the ETFs will close on June 20, the statement said BlackRock wants to protect the value of the ETFs' Russian security holdings by making disposals in an orderly manner in an effort to return proceeds to shareholders if any value can be realized.
"The Russian securities will therefore remain in the funds until such time as it is possible, practicable and appropriate, in the manager's view, to liquidate each of the positions in an orderly and managed way," the statement said.
BlackRock has a mutual fund domiciled in Luxembourg and an ETF in the U.S. — the $1.02 million iShares MSCI Russia ETF — with Russian exposure that are suspended but haven't been closed, a BlackRock spokesman said.
"Any decisions on the future viability of suspended funds with significant exposure to Russia will be made taking into account the interest of investors, market conditions and the regulatory framework or required regulatory approvals that apply to the funds," BlackRock said in a separate statement provided by the spokesman.
BlackRock had $9.6 trillion in total assets under management as of March 31.
